IVA - Can we sell our house?

longtermplanner · 23 July 2014 at 7:37PM

In comparison with your IVA on your credit file, the extra search is going to be totally unimportant.

I don't actually think you should stay where you are. Family life is much more important than finances and debts. If your place is too small now, it is going to be impossible when you have a toddler and a toddler's toys. I think you would do better to sell now, clear your debts and rent.

I am sorry, when I asked for figures, I should also have asked what your house is currently worth. Standard IVA terms include a proposal that you would be left with 15% of the equity after mortgage release. I am trying to work out what your creditors are likely to get if your IVA goes to the end.

chirpychick · 23 July 2014 at 7:48PM

longtermplanner wrote: »

In comparison with your IVA on your credit file, the extra search is going to be totally unimportant.

I don't actually think you should stay where you are. Family life is much more important than finances and debts. If your place is too small now, it is going to be impossible when you have a toddler and a toddler's toys. I think you would do better to sell now, clear your debts and rent.

I am sorry, when I asked for figures, I should also have asked what your house is currently worth. Standard IVA terms include a proposal that you would be left with 15% of the equity after mortgage release. I am trying to work out what your creditors are likely to get if your IVA goes to the end.

He is 19 months old so we are already struggling with toys and things, the saving grace is that we have a garden and so right now we are outside all day, i'm actually dreading the Autumn/Winter!

Our House is worth £235,000 (We owe £152,000 on the mortgage)

so 235k-152k = 83k

Then to account for the payplan debt incl their fee's, solicitors and estate agents fees and moving costs etc I estimated we would be left with about 28k
My husband earns £36,500 a year.
We looked into rented and we would be looking at paying about £925-£1,000 a month (we pay £972 on the mortgage at the moment).

It is a really tough call, we have being going around in circles over it.

My worry is about actually finding someone to rent to us with bad credit rating but we could get a guarantor.

chirpychick · 23 July 2014 at 8:10PM

I must have made an error on my original figures

unless i've missed something off this is what i'm thinking.

sell house for £235,000 (prepared to give or take obviously)
pay off mortgage £152,000
pay payplan £46,116 (current figures)
estate agent fee's £4230
Solicitors fee's £922 inc VAT fixed
Moving costs estimate of £1,000

£30,702

Giggles_Fairy · 23 July 2014 at 8:44PM

Ah I thought by 'the amount of equity after payiny off x,y,z' was not accounting for paying off the debts too. So the 28k was what you would use to pay off your debt!

Based upon what you say it does seem you will be able to pay it off and have money left over.

The best way to look at how much you would actually have to pay off your IVA is to ask for a '100p in the £ calculation' from your IVA company. It may take them a few days to provide this. The Supervisor fee can vary depending on how much is paid in, what modification are applied etc .

If you are going to have money left overand the house is currently not big enough I would seriously consider selling!

As you will be looking to rent whilst still on an active IVA you can also get your IVA company to provide a letter confirming it's status and that you will be settling it when your property sells etc. This could help a rental application. I would maybe enquire with some landlords first to know your position.

At the moment the chance of a remo is nil - yes. However this could change - before the recession people on IVA's were able to remortgage. So it's not a given but it is likely you will have to do a 12 month extention instead. The 'searches will be the footprint on your credit file, however it may not even get as far as a credit search. Some mortgage companies have a blank 'no IVA rule' so if they are willing, you could ask them to put in writing they would not offer a remo as you are on an IVA.

chirpychick · 23 July 2014 at 9:18PM

ignore this please, posted this post in error

UpToMyNeckInIt · 23 July 2014 at 11:36PM

Chirpychick,

I too live in the south east, and you are right about prices.

I understand your lack of space dilemma, but I agree with debtfree2016, in that you should look at the bigger picture before selling up.

Prices round here look set to keep going up, and this has a knock on effect with rental prices doing likewise. Despite this, it is highly unlikely that you will be able to release equity via remortgage. So assuming you have a standard iva, it will go on into year 6 instead.

Round my way it is more expensive to rent an equivalent property than to have it mortgaged, so you will need to consider this if up-sizing.

Whilst i have no idea what living conditions you are having to ensure, my first thought is that is is far cheaper to tough it out, and replace the sofa with a futon/decent sofa bed. In 2.5 years time when your credit rating recovers, you may be able to buy somewhere a little bigger.

Good luck.

IVA - Can we sell our house?

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